Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | May 05, 2023 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-36305 | |
Entity Registrant Name | SEMLER SCIENTIFIC, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 26-1367393 | |
Entity Address, Address Line One | 2340-2348 Walsh Avenue, Suite 2344 | |
Entity Address, City or Town | Santa Clara | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95051 | |
City Area Code | 877 | |
Local Phone Number | 774-4211 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | SMLR | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 6,851,498 | |
Entity Central Index Key | 0001554859 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Statements of Income
Condensed Statements of Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Condensed Statements of Income | ||
Revenues | $ 18,206 | $ 14,016 |
Operating expenses: | ||
Cost of revenues | 1,269 | 970 |
Engineering and product development | 1,630 | 1,126 |
Sales and marketing | 5,192 | 4,676 |
General and administrative | 3,859 | 3,302 |
Total operating expenses | 11,950 | 10,074 |
Income from operations | 6,256 | 3,942 |
Interest income | 484 | 1 |
Change in fair values of notes held for investment | (107) | |
Other income, net | 377 | 1 |
Pre-tax net income | 6,633 | 3,943 |
Income tax provision | 1,664 | 583 |
Net income | $ 4,969 | $ 3,360 |
Net income per share, basic | $ 0.74 | $ 0.50 |
Weighted average number of shares used in computing basic income per share | 6,701,199 | 6,777,950 |
Net income per share, diluted | $ 0.63 | $ 0.41 |
Weighted average number of shares used in computing diluted income per share | 7,896,043 | 8,116,456 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 5,305 | $ 23,014 |
Short-term investments | 37,663 | 20,073 |
Trade accounts receivable, net of reserves of $154 and $109, respectively | 9,343 | 3,884 |
Inventory, net | 512 | 469 |
Prepaid expenses and other current assets | 2,769 | 1,468 |
Total current assets | 55,592 | 48,908 |
Assets for lease, net | 2,873 | 2,478 |
Property and equipment, net | 703 | 667 |
Long-term investments | 821 | 821 |
Notes held for investment (includes measured at fair value of $4,072 and $3,679, respectively) | 5,072 | 4,679 |
Other non-current assets | 2,818 | 2,842 |
Long-term deferred tax assets | 2,378 | 2,298 |
Total assets | 70,257 | 62,693 |
Current liabilities: | ||
Accounts payable | 298 | 835 |
Accrued expenses | 7,206 | 4,748 |
Deferred revenue | 1,286 | 1,160 |
Other short-term liabilities | 128 | 114 |
Total current liabilities | 8,918 | 6,857 |
Long-term liabilities: | ||
Other long-term liabilities | 138 | 160 |
Total long-term liabilities | 138 | 160 |
Commitments and contingencies (Note 14) | ||
Stockholders' equity: | ||
Common stock, $0.001 par value; 50,000,000 shares authorized; 6,920,643, and 6,906,544 shares issued, and 6,706,221 and 6,692,122 shares outstanding (treasury shares of 214,422 and 214,422), respectively | 7 | 7 |
Additional paid-in capital | 17,005 | 16,449 |
Retained earnings | 44,189 | 39,220 |
Total stockholders' equity | 61,201 | 55,676 |
Total liabilities and stockholders' equity | $ 70,257 | $ 62,693 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Condensed Balance Sheets | ||
Reserves on trade accounts receivable (in dollars) | $ 154 | $ 109 |
Notes, Fair value | $ 4,072 | $ 3,679 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 6,920,643 | 6,906,544 |
Common stock, shares outstanding | 6,706,221 | 6,692,122 |
Treasury stock, shares | 214,422 | 214,422 |
Condensed Statements of Stockho
Condensed Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Treasury Stock | Additional Paid-In Capital | Retained Earnings | Total |
Balance at Dec. 31, 2021 | $ 7 | $ 20,645 | $ 24,895 | $ 45,547 | |
Balance (in shares) at Dec. 31, 2021 | 6,824,380 | ||||
Balance (in shares) at Dec. 31, 2021 | 65,922 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Treasury stock acquired | (99) | (99) | |||
Treasury stock acquired (Shares) | (2,030) | ||||
Employee stock grants | 628 | 628 | |||
Employee stock grants (in shares) | 8,406 | ||||
Taxes paid related to net share settlement of equity awards | (106) | (106) | |||
Taxes paid related to net share settlement of equity awards (in shares) | (1,418) | ||||
Stock option exercises | 62 | 62 | |||
Stock option exercises (in shares) | 23,800 | ||||
Net income | 3,360 | 3,360 | |||
Balance at Mar. 31, 2022 | $ 7 | 21,130 | 28,255 | 49,392 | |
Balance (in shares) at Mar. 31, 2022 | 6,855,168 | ||||
Balance (in shares) at Mar. 31, 2022 | 67,952 | ||||
Balance at Dec. 31, 2021 | $ 7 | 20,645 | 24,895 | 45,547 | |
Balance (in shares) at Dec. 31, 2021 | 6,824,380 | ||||
Balance (in shares) at Dec. 31, 2021 | 65,922 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Treasury stock acquired | $ (4,991) | ||||
Treasury stock acquired (Shares) | (148,500) | ||||
Balance at Mar. 31, 2023 | $ 7 | 17,005 | 44,189 | $ 61,201 | |
Balance (in shares) at Mar. 31, 2023 | 6,920,643 | ||||
Balance (in shares) at Mar. 31, 2023 | 214,422 | (214,422) | |||
Balance at Dec. 31, 2022 | $ 7 | 16,449 | 39,220 | $ 55,676 | |
Balance (in shares) at Dec. 31, 2022 | 6,906,544 | ||||
Balance (in shares) at Dec. 31, 2022 | 214,422 | (214,422) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Employee stock grants | 695 | $ 695 | |||
Employee stock grants (in shares) | 18,048 | ||||
Taxes paid related to net share settlement of equity awards | (146) | (146) | |||
Taxes paid related to net share settlement of equity awards (in shares) | (3,949) | ||||
Stock-based compensation | 7 | 7 | |||
Net income | 4,969 | 4,969 | |||
Balance at Mar. 31, 2023 | $ 7 | $ 17,005 | $ 44,189 | $ 61,201 | |
Balance (in shares) at Mar. 31, 2023 | 6,920,643 | ||||
Balance (in shares) at Mar. 31, 2023 | 214,422 | (214,422) |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 4,969 | $ 3,360 |
Reconciliation of Net Income to Net Cash Provided by Operating Activities: | ||
Depreciation | 129 | 155 |
Deferred tax (income) expense | (80) | 179 |
Loss on disposal of assets for lease | 78 | 74 |
Allowance for credit losses | 48 | 21 |
Change in fair values of notes held for investment | 107 | |
Gain on short-term investments | (305) | |
Stock-based compensation | 702 | 628 |
Changes in Operating Assets and Liabilities: | ||
Trade accounts receivable | (5,507) | (1,818) |
Inventory | (43) | (45) |
Prepaid expenses and other current assets | (1,301) | (1,988) |
Other non-current assets | 25 | 19 |
Accounts payable | (537) | (68) |
Accrued expenses | 2,458 | 946 |
Other current and non-current liabilities | 118 | 39 |
Net Cash Provided by Operating Activities | 861 | 1,502 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Additions to property and equipment | (95) | (122) |
Proceeds from maturities of short-term investments | 20,211 | |
Purchase of short-term investments | (37,496) | |
Purchase of notes held for investment | (500) | |
Purchase of assets for lease | (544) | (134) |
Net Cash Used in Investing Activities | (18,424) | (256) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Taxes paid related to net settlement of equity awards | (146) | (106) |
Treasury stock acquired | (99) | |
Proceeds from exercise of stock options | 62 | |
Net Cash Used in Financing Activities | (146) | (143) |
(DECREASE) INCREASE IN CASH | (17,709) | 1,103 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 23,014 | 37,323 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ 5,305 | $ 38,426 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
Basis of Presentation | |
Basis of Presentation | 1 . Basis of Presentation Semler Scientific, Inc., a Delaware corporation (“Semler” or “the Company”), prepared the unaudited interim financial statements included in this report in accordance with United States generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 23, 2023 (the “Annual Report”). In the opinion of management, these financial statements include all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the financial position, results of operations and cash flows for the periods presented. The results of operations for the interim periods shown in this report are not necessarily indicative of the results that may be expected for any future period, including the full year. Credit Losses on Financial Instruments , Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ Financial instruments include cash, cash equivalents, marketable and non-marketable securities, and accounts receivable. Recently Issued Accounting Pronouncements Accounting Pronouncements Recently Adopted Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . Codification Improvements to Topic 326 Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments Financial Instruments – Credit Losses (Topic 326); Codification Improvements to Financial Instruments Financial instruments – credit losses (Topic 326): measurement of credit losses on financial statements Business Combinations (Topic 805): ccounting for Contract Assets and Contract Liabilities from Contracts with Customers Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, |
Variably-Priced Revenue
Variably-Priced Revenue | 3 Months Ended |
Mar. 31, 2023 | |
Variably-Priced Revenue | |
Variably-Priced Revenue | 2. Variably-Priced Revenue The Company recognizes variable-fee licenses (i.e., fee per test) and sales of hardware equipment and accessories in accordance with ASC 606, Revenue from Contracts with Customers Upon shipment under variable-fee license contracts, assets for lease are sold to the customers, and the asset is recognized as cost of revenue . |
Accounts Receivable and Allowan
Accounts Receivable and Allowance for Credit Losses | 3 Months Ended |
Mar. 31, 2023 | |
Accounts Receivable and Allowance for Credit Losses | |
Accounts Receivable and Allowance for Credit Losses | 3. Accounts Receivable and Allowance for Credit Losses |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2023 | |
Inventory | |
Inventory | 4. Inventory, which is made up of finished goods, is recorded at the lower of cost or net realizable value. Cost is determined on the first-in, first-out method. The Company periodically analyzes its inventory levels to identify inventory that has a cost basis in excess of its estimated realizable value and writes down such inventory as appropriate. Inventory balance was $512 and $469 as of March 31, 2023 and December 31, 2022, respectively. |
Assets for Lease, net
Assets for Lease, net | 3 Months Ended |
Mar. 31, 2023 | |
Assets for Lease, net | |
Assets for Lease, net | 5. Assets for Lease, net The Company enters into contracts with customers for the Company’s QuantaFlo product. The Company has determined these contracts meet the definition of a lease under Topic 842. Operating leases are short-term in nature (monthly, quarterly or one year), and all of which have renewal options. The assets that may be associated with these leasing arrangements are identified below as assets for lease. Upon shipment under operating leases, assets for lease are depreciated. During the three months ended March 31, 2023 and 2022, the Company recognized approximately $9,304 and $7,889 , respectively, in lease revenues related to these arrangements, which is included in Revenues on the Condensed Statements of Income. Assets for lease consist of the following: March 31, December 31, 2023 2022 Assets for lease $ 3,970 $ 3,702 Less: accumulated depreciation (1,097) (1,224) Assets for lease, net $ 2,873 $ 2,478 Depreciation expense amounted to $70 and $108 for the three months ended March 31, 2023 and 2022, respectively. Reduction to accumulated depreciation for returned and retired items was $197 and $90 for the three months ended March 31, 2023 and 2022, respectively. The Company recognized a loss on disposal of assets for lease in the amount of $78 and $74 for the three months ended March 31, 2023 and 2022, respectively. |
Property and Equipment, net
Property and Equipment, net | 3 Months Ended |
Mar. 31, 2023 | |
Property and Equipment, net | |
Property and Equipment, net | 6. Property and Equipment, net Capital assets consist of the following: March 31, December 31, 2023 2022 Capital assets $ 1,301 $ 1,206 Less: accumulated depreciation (598) (539) Capital assets, net $ 703 $ 667 Depreciation expense amounted to $46 for the three months ended March 31, 2023 and 2022, respectively. |
Long-Term Investments
Long-Term Investments | 3 Months Ended |
Mar. 31, 2023 | |
Long-Term Investments | |
Long-Term Investments | 7. Long-Term Investments Long term investments consist of the following for the periods presented: March 31, December 31, 2023 2022 Investments in SYNAPS Dx $ 512 $ 512 Investments in Mellitus Health Inc. 309 309 Total initial cost $ 821 $ 821 In September 2020, the Company acquired a promissory note from NeuroDiagnostics Inc., which is doing business as SYNAPS Dx, in the principal amount of $500, $100 of which was retained for expense reimbursement In October 2020, the Company acquired from a seller a convertible promissory note previously issued by Mellitus Health Inc., (“Mellitus”) to such seller for a purchase price of $59, which represented the $50 principal amount of the note and all accrued and unpaid interest thereon. Subsequently, in October 2020, the Company purchased $250 of shares of preferred stock of Mellitus, and in connection with such transaction, the convertible promissory note, together with all accrued interest thereon, also converted pursuant to its terms into shares of preferred stock of Mellitus as repayment in full of such convertible promissory note. The value of consideration exchanged for the shares of preferred stock of Mellitus held by the Company as of March 31, 2023 and December 31, 2022 was approximately $309. The investments in SYNAPS Dx and Mellitus securities that were retained by the Company as of March 31, 2023 were recorded in accordance with ASC 321, Investments – equity securities, The Company qualitatively assessed both investments for impairment in accordance with ASC 321. As of March 31, 2023 and December 31, 2022, the Company determined that there was no impairment for the investment in SYNAPS Dx and the investment in Mellitus. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Measurements | |
Fair Value Measurements | 8. Fair Value Measurements Fair Value Hierarchy Level 1 Level 2 Level 3 Total As of March 31, 2023 U.S. Treasury bills $ 37,663 $ — $ — $ 37,663 (Included in short-term investments) Investment in debt securities — — 4,072 4,072 (Included in notes held for investment) Total Assets $ 37,663 $ — $ 4,072 $ 41,735 Level 1 Level 2 Level 3 Total As of December 31, 2022 U.S. Treasury bill $ 20,073 $ — $ — $ 20,073 (Included in short-term investments) Investment in debt securities — — 3,679 3,679 (Included in notes held for investment) Total Assets $ 20,073 $ — $ 3,679 $ 23,752 Treasury bills were purchased on February 10, 2023, March 3, 2023 and March 24, 2023, at a cost of $9,999 , $20,498 and $6,999 , respectively, and fair values accrete to maturity dates at an interest rate of 4.61% , 4.84% and 4.51% , resepectively. As of March 31, 2023, the interest income recorded on these bills was $167 . The Company's privately held debt securities are recorded at fair value on a recurring basis. The estimation of fair value for these investments requires the use of significant unobservable inputs, and as a result, the Company deems these assets as Level 3 within the fair value measurement framework. For investments without a readily determinable fair value, the Company applies valuation methods based on information available, including the market approach and bond plus call pricing approach. Observable transactions, such as the issuance of new equity by an investee and changes in market yield, are indicators of investee enterprise value and are used to estimate the fair value of the Company’s investments. The Company valued the Monarch Debt Security using a bond plus call option model reflecting the cash flow from the Monarch Debt Security and assuming a 20% probability of an equity financing, a 20% probability of a change of control, and a 60% probability of payment at maturity or an insolvency event. The Company valued the Mellitus debt security using a bond plus call option model reflecting the cash flow from the Mellitus debt securities and assuming a 70% probability of an equity financing, 8% probability of a change of control, and a 22% probability of payment at maturity or an insolvency event. The fair value of the Company’s privately held debt securities were estimated at $4,072 and $3,679 as of March 31, 2023 and December 31, 2022, respectively. March 31, 2023 Risk-free rate 3.67% - 4.67% Cash flow discount rate 26.4% - 28.7% Expert term in years 0.25 - 3.68 Expected volatility 105.0%- 205.0% The following table reprents changes in the notes held for the investments with significant unobservable inputs (Level 3): Convertible Notes Balance as of December 31, 2022 $ 3,679 Purchased 500 Change in fair value of the notes held for investment (107) Balance as of March 31, 2023 $ 4,072 |
Notes Held for Investment
Notes Held for Investment | 3 Months Ended |
Mar. 31, 2023 | |
Notes Held for Investment | |
Notes Held for Investment | 9. Notes Held for Investment Notes receivable consist of the following for the periods presented: March 31 December 31 2023 2022 Senior secured promissory notes $ 1,000 $ 1,000 Secured convertible promissory notes 4,072 3,679 Total notes held for investment $ 5,072 $ 4,679 In June 2022, the Company loaned Mellitus an aggregate of $1,000 through the purchase of two senior secured promissory notes that bear interest at a rate of 5% per annum, and mature in three years unless accelerated due to an event of default as provided in the notes. Repayment of notes is secured by a first priority interest in all of Mellitus’ assets. In May 2022, to facilitate the subordination of such notes in connection with the purchase of the senior secured notes, the Company acquired $179 aggregate principal amount of outstanding convertible notes of Mellitus, which, as amended, mature July 5, 2025, if not automatically converted into preferred stock prior thereto. This note bears an interest rate of 10% per annum. In December 2022, the Company entered in a senior convertible promissory note arrangement with Monarch Medical Technology, LLC (“Monarch”), providing Monarch with up to $5,000 in available funding, of which $4,000, in principle was drawn as of March 31, 2023 (the “Debt Security”). The remaining $1,000 is available to be drawn at any time unless there is an Event of Default that is continuing. The Debt Security accrues interest at 10% per annum, payable monthly, and the principal balance is due December 6, 2024. The note along with up to $100 of transaction expenses is due and payable on the occurrence of an event of default or change of control unless accelerated due to the conversion into preferred stock prior thereto at the option of the Company. The Company has the option to extend the maturity date for two consecutive one-year terms. The Debt Security can be converted into Monarch’s shares at the Company’s option upon (a) an equity financing at Monarch, (b) upon a change of control at Monarch, or (c) at the Company’s option at any time prior to the maturity date. If converted upon a change of control, the Company has the right to receive a cash payment equal to the balance of the Debt Security or the amount payable upon conversion into Monarch’s shares. The Debt Security is redeemable at any time at Monarch’s option or automatically upon an Event of Default. The Company made an irrevocable election to account for the Debt Securities using the fair value option under ASC 825 – Financial Instruments The Company recognizes interest income as it accrues on the Debt Securities, which is included in interest income in the statements of income. For the quarters ended March 31, 2023 and 2022, the Company recognized $82 and $0, respectively, of interest income from Monarch and Mellitus notes, which is included in prepaid and other current assets. The Company recognizes changes in fair value of the Debt Securities in the statements of income separately from the interest income. For the quarter ended March 31, 2023, the Company recorded change in fair value of $107. |
Other Non-current assets
Other Non-current assets | 3 Months Ended |
Mar. 31, 2023 | |
Other Non-current assets | |
Other Non-current assets | 10. Other Non-current assets Other non-current assets consist of the following for the periods presented: March 31, December 31, 2023 2022 Prepaid licenses $ 2,487 $ 2,490 Other 331 352 Total other non-current assets $ 2,818 $ 2,842 In April 2021, the Company entered into a five-year agreement, as amended in December 2022, with Mellitus to exclusively market and distribute its product line in the United States, including Puerto Rico, except for selected accounts. Under this distribution agreement and its amendments, the Company agreed to purchase $2,500 of product licenses and prepaid $2,500 for the license purchases. This prepayment, which was reclassed to a long-term asset in 2022 due to the change in the estimation of the recoverability period is expected to be more than one year. The long-term portion of the prepaid licenses are included in the Other non-current assets. Unless early terminated in accordance with its terms, the exclusive distribution agreement will remain in full force and effect until April 1, 2026, and for renewal periods of one year each upon its anniversary date, unless terminated by at least 60 days written notice prior to such an anniversary date. Either party may terminate the agreement by written notice to the other party upon or after the breach of any material provision of this agreement by the other party, if the other party has not cured such breach within 60 days after written notice thereof from the non-breaching party. Revenue from these product licenses will be recognized in accordance with ASC 606, Revenue from Contracts with Customers . The Company did not generate significant revenue from these product licenses during the three months ended March 31, 2023 and 2022. Other includes right-of-use asset (“ROU”) of $212 , miscellaneous receivables of $100 , and long-term deposits of $19 as of March 31, 2023. As of December 31, 2022, ROU was $233 , miscellaneous receivable was $100 , and long-term deposit was $19 . |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 31, 2023 | |
Accrued Expenses | |
Accrued Expenses | 11 . Accrued expenses consist of the following: March 31, December 31, 2023 2022 Compensation $ 2,682 $ 2,467 Accrued Taxes 3,781 1,923 Miscellaneous Accruals 743 358 Total Accrued Expenses $ 7,206 $ 4,748 |
Concentration of Credit Risk
Concentration of Credit Risk | 3 Months Ended |
Mar. 31, 2023 | |
Concentration of Credit Risk | |
Concentration of Credit Risk | 12. Credit risk is the risk of loss from amounts owed by the financial counterparties. Credit risk can occur at multiple levels; as a result of broad economic conditions, challenges within specific sectors of the economy, or from issues affecting individual companies. Financial instruments that potentially subject the Company to credit risk consist of cash and accounts receivable. The Company maintains cash with major financial institutions. The Company’s cash consists of bank deposits held with banks that, at times, exceed federally insured limits. The cash and cash equivalents also include short-term treasury bills with original maturities of three months or less. As of March 31,2023, the Company held deposits of $5,305 , approximately $5,198 of which held by First Republic Bank (“FRB”). The Company’s deposits at FRB are largely uninsured. On May 1, 2023, JP Morgan Chase Bank (“JPM”) agreed to acquire all the assets and liabilities of FRB. Consequently, all depositors of FRB will become the depositors of JPM. Deposits at JPM are largely uninsured. The Company also invested in U.S. treasury bills in the amount of $37,663 Company limits its credit risk by dealing with counterparties that are considered to be of high credit quality and by performing periodic evaluations of the relative credit standing of these financial institutions. Management periodically monitors the creditworthiness of its customers and believes that it has adequately provided for exposure to potential credit loss. F or the three months ended March 31, 2023, two customers (including affiliates) accounted for 40.9% and 33.5% of the Company’s revenues,. For the three months ended March 31, 2022, two customers (including affiliates) accounted for 39.2% and 31.7% of the Company’s revenues. As of March 31, 2023, two vendors accounted for 20.6% and 13.9% of the Company’s accounts payable. As of December 31, 2022, two vendors accounted for 25.8% and 10.8% of the Company’s accounts payable. |
Lessee Arrangements
Lessee Arrangements | 3 Months Ended |
Mar. 31, 2023 | |
Lessee Arrangements | |
Lessee Arrangements | 13. On July 31, 2020, the Company entered into a 61-month lease agreement for office space to use, as necessary, for office administration, lab space and assembly and storage purposes, located in Santa Clara, California. The Company took possession of the leased office space in September 2020, and the lease is effective through September 30, 2025. As of March 31, 2023, the remaining lease term is two years and six months with no options to renew. The Company recognized facilities lease expenses of $22 and $22 for the three months ended March 31, 2023 and 2022, respectively. The following table summarizes the future minimum rental payments required under operating leases that had initial or remaining non-cancelable lease terms greater than one year as of March 31, 2023: Total 2023 Remaining period 67 2024 93 2025 71 Total undiscounted future minimum lease payments 231 Less: present value discount (7) Total lease liabilities 224 Lease expense in excess cash payment (12) Total ROU asset $ 212 As of March 31, 2023, the Company’s ROU asset was $212 , which was recorded on the Company’s balance sheet as other noncurrent assets, and the Company’s current and noncurrent lease liabilities were $86 and $138 , respectively, which were recorded on the Company’s balance sheet as other short-term liabilities and other long-term liabilities, respectively. Lessor Arrangements The Company enters into contracts with customers for the Company’s QuantaFlo product. The Company has determined these contracts meet the definition of a lease under Topic 842. The lease portfolio primarily consists of operating leases that are short-term in nature (monthly, quarterly or one year, all of which have renewal options). The Company allocates the consideration in a bundled contract with its customers based on relative standalone selling prices of the lease and non-lease components. The Company made an accounting policy election to apply the practical expedient to not separate lease and eligible non-lease components . The lease component is the predominant component and consists of fees charged for use of the equipment over the period of the arrangement. The nature of the eligible non-lease component is primarily software support. The assets associated with these leasing arrangements are separately identified in the Balance Sheet as Assets for Lease and separately disclosed in Note 4 to the Unaudited Condensed Financial Statements. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies | |
Commitments and Contingencies | 14. Senior Secured Convertible Note In December 2022, the Company committed a loan of $5,000 to Monarch through the purchase of a senior secured convertible promissory note that bears interest at a rate of 10% per annum and matures on the second anniversary from the issue date, which can be extended for up to two additional consecutive one-year terms in the Company’s sole discretion. The note along with up to $100 of transaction expenses is due and payable on the occurrence of an event of default or change of control unless accelerated due to the conversion into preferred stock prior thereto at the option of the Company. Monarch borrowed $3,500 on the issuance date and $500 in the first quarter of 2023 out of the committed amount of $5,000 and has agreed to reimburse the Company for up to $100 of transaction expense. Repayment of the note is secured by a first priority interest in all of Monarchs’ assets. See Note 8 to the Unaudited Condensed Financial Statements. Indemnification Obligations The Company enters into agreements with customers, partners, lenders, consultants, lessors, contractors, sales representatives and parties to certain transactions in the ordinary course of the Company’s business. These agreements may require the Company to indemnify the other party against third party claims alleging that its product infringes a patent or copyright. Certain of these agreements require the Company to indemnify the other party against losses arising from: a breach of representations or covenants, claims relating to property damage, personal injury or acts or omissions of the Company, its employees, agents or representatives. The Company has also agreed to indemnify the directors and certain of the officers and employees in accordance with the by-laws of the Company. These indemnification provisions will vary based upon the nature and terms of the agreements. In many cases, these indemnification provisions do not contain limits on the Company’s liability, and the occurrence of contingent events that will trigger payment under these indemnities is difficult to predict. As a result, the Company cannot estimate its potential liability under these indemnities. The Company believes that the likelihood of conditions arising that would trigger these indemnities is remote and, historically, the Company has not made any significant payment under such indemnification provisions. Accordingly, the Company has not recorded any liabilities relating to these agreements. In certain cases, the Company has recourse against third parties with respect to the aforesaid indemnities, and the Company believes it maintains adequate levels of insurance coverage to protect the Company with respect to potential claims arising from such agreements. 401(K) Plan Effective January 1, 2022, the Company started to match 50% of employee’s 401(k) deferral up to a maximum of 6% of the employee’s eligible earnings. Other The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) provides for an employee retention payroll tax credit for certain employers, which is a refundable tax credit against certain employment taxes equal to 50% of the qualified wages an eligible employer pays to employees after March 12, 2020 and before December 31, 2021. For each employee, wages (including health plan costs) up to $10,000 can be counted to determine the amount of the 50% credit. The Company started claiming this credit on its July 2020 payroll until mid-April 2021 when it determined that it no longer qualified given the change in government restrictions on travel that had impacted its sales activities. The Company’s determination that it qualified to claim the employee retention payroll tax credit is subjective and subject to audit by the Internal Revenue Service (“IRS”). If the IRS were to disagree with the Company’s tax position, it could be required to pay the retention credit claimed, along with penalties. As of March 31, 2023, the Company has claimed $1.24 million in this retention credit. No credit was claimed for the three months ended March 31, 2023 and for the year ended December 31, 2022. Litigation |
Stock Incentive Plan
Stock Incentive Plan | 3 Months Ended |
Mar. 31, 2023 | |
Stock Incentive Plan | |
Stock Incentive Plan | 15 . The Company’s stock-based compensation program is designed to attract and retain employees while also aligning employees’ interests with the interests of its stockholders. Stock options have been granted to employees under the stockholder-approved 2007 Key Person Stock Option Plan (“2007 Plan”) and stock options and restricted stock have been granted to employees under the stockholder-approved 2014 Stock Incentive Plan (“2014 Plan”). Stockholder approval of the 2014 Plan became effective in September 2014. The 2014 Plan originally provided that the aggregate number of shares of common stock that may be issued pursuant to awards granted under the 2014 Plan may not exceed 450,000 shares (the “Share Reserve”), however in October 2015, the stockholders approved a 1,500,000 increase to the Share Reserve. In addition, the Share Reserve automatically increases on January 1st of each year, for a period of not more than 10 years, beginning on January 1st of the year following the year in which the 2014 Plan became effective and ending on (and including) January 1, 2024, in an amount equal to 4% of the total number of shares of common stock outstanding on December 31st of the preceding calendar year. The Company’s Board of Directors may act prior to January 1st of a given year to provide that there will be no January 1st increase in the Share Reserve for such year or that the increase in the Share Reserve for such year will be a lesser number of shares of common stock than would otherwise occur. On January 1, 2023, the Share Reserve increased by 267,685. The Share Reserve is currently 3,582,888 shares as of March 31, 2023. In light of stockholder approval of the 2014 Plan, the Company no longer grants equity awards under the 2007 Plan. As of March 31, 2023, there were no shares available for future stock-based compensation grants under the 2007 Plan and 1,725,256 shares of an aggregate total of 3,582,888 shares were available for future stock-based compensation grants under the 2014 Plan. Treasury Stock Acquired as of March 31, 2023. Stock Awards The Company granted fully vested stock awards of 18,048 shares of common stock to the non-employee members of the board of directors and employees as compensation during the three months ended March 31, 2023. Net shares issued after deducting taxes paid on these grants were 14,099. Fair value of these stock awards on grant date was $695. The Company granted fully vested stock awards of 8,406 shares of common stock to the non-employee members of the board of directors, employees and one non-employee as compensation during the three months ended March 31, 2022. Net shares issued after deducting taxes paid on these grants were Stock Options Aggregate intrinsic value represents the difference between the closing market value as of March 31, 2023 of the underlying common stock and the exercise price of outstanding, in-the-money options. A summary of the Company’s stock option activity and related information for the three months ended March 31, 2023 is as follows: Options Outstanding Weighted Average Number of Weighted Remaining Aggregate Stock Options Average Contractual Intrinsic Value Outstanding Exercise Price Term (In Years) (In Thousands) Balance, December 31, 2022 1,287,847 $ 3.44 3.03 $ 38,053 Options exercised — — — — Options granted — — — — Balance, March 31, 2023 1,287,847 $ 3.44 2.78 $ 30,100 Exercisable as of March 31, 2023 1,282,847 $ 3.34 2.76 $ 30,100 As of March 31, 2023, No options were granted during the three months ended March 31, 2023 and 2022. The Company has recorded an expense of $702 and $628 Three months ended March 31, 2023 2022 Engineering and Product Development $ 45 $ 45 Sales and Marketing 170 172 General and Administrative 487 411 Total $ 702 $ 628 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Taxes | |
Income Taxes | 16. Income Taxes The Company’s income tax provision for the three months ended March 31, 2023 was $1,664 and for the three months ended March 31, 2022 was $583. The income tax provision reflects its estimate of the effective tax rates expected to be applicable for the full year, adjusted for any discrete events that are recorded in the period in which they occurred. The estimates are re-evaluated each quarter based on the estimated tax expense for the full year. For uncertain tax positions that meet a “more likely than not” threshold, the Company recognizes the benefit of uncertain tax positions in the financial statements. The Company’s practice is to recognize interest and penalties, if any, related to uncertain tax positions in income tax expense in the statements of operations. The effective tax rate for the three months ended March 31, 2023 was 24.68% , compared to 14.79% , in the same period of the prior year. The in crease in effective tax rate for the three months ended March 3 1 , 202 3 was primarily due to lower tax benefits associated with employee stock-based compensation . The effective tax rate for the three months ended March 31, 2023 differed from the U.S. federal statutory rate of 21% primarily due to state income taxes (net of federal benefit) and federal and state research and development (“R&D”) credit benefit. The effective tax rate for the three months ended March 31, 2022 differed from the U.S. federal statury rate of 21% primarily due to state income taxes (net of federal benefit) partially offset by tax benefits associated with employee share-based compensation plans and federal and state R&D credit benefit. As of March 31, 2023, and December 31, 2022, the Company had $447 and $401, respectively of unrecognized tax benefits, excluding interest and penalties. The Company’s practice is to recognize interest and penalty expenses related to uncertain tax positions in income tax expense, which was $42 and $30 for the three months ended March 31, 2023, and the year ended December 31, 2022, respectively. On August 16, 2022, the Creating Helpful Incentives to Produce Semiconductors for America Act of 2022 (“CHIPS and Science Act”), and Inflation Reduction Act (“IRA”) was signed into law in the United States. Among other things, CHIPS and Science Act provides incentives and tax credits for the global chip manufacturers who choose to set-up or expand existing operations in the United States. The IRA imposes a 15% corporate alternative minimum tax for tax years beginning after December 31, 2022, levies a 1% excise tax on net stock repurchases after December 31, 2022, and provides tax incentives to promote clean energy. This act is primarily applicable to large corporations with an annual revenue of $1 billion or over. Implementation of this act has no impact on the Company’s financial statements as of March 31, 2023. |
Net Income Per Share, Basic and
Net Income Per Share, Basic and Diluted | 3 Months Ended |
Mar. 31, 2023 | |
Net Income Per Share, Basic and Diluted | |
Net Income Per Share, Basic and Diluted | 17. Basic earnings per share (“EPS”) represent net income attributable to common stockholders divided by the weighted average number of common shares outstanding during the measurement period. Diluted EPS represents net income attributable to common stockholders divided by the weighted average number of common shares outstanding during the measurement period while also giving effect to all potentially dilutive common shares that were outstanding during the period using the treasury stock method. Basic and diluted EPS is calculated as follows: Three months ended March 31, 2023 2022 Shares Net Income EPS Shares Net Income EPS Basic 6,701,199 $ 4,969 $ 0.74 6,777,950 $ 3,360 $ 0.50 Common stock warrants 64,825 — 71,839 — Common stock options 1,130,019 — 1,266,667 — Diluted 7,896,043 $ 4,969 $ 0.63 8,116,456 $ 3,360 $ 0.41 As of March 31, 2023, 5,000 options related to stock awards were granted and unvested. These options were considered anti-dilutive for the computation of diluted net income per share. Hence, these options were excluded from the computation of diluted net income per share. As of March 31, 2022, there were no weighted average shares outstanding of common stock equivalents excluded from the computation of diluted net income per share. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Basis of Presentation | |
Basis of Presentation | Semler Scientific, Inc., a Delaware corporation (“Semler” or “the Company”), prepared the unaudited interim financial statements included in this report in accordance with United States generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 23, 2023 (the “Annual Report”). In the opinion of management, these financial statements include all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the financial position, results of operations and cash flows for the periods presented. The results of operations for the interim periods shown in this report are not necessarily indicative of the results that may be expected for any future period, including the full year. |
Credit Losses on Financial Instruments | Credit Losses on Financial Instruments , Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ Financial instruments include cash, cash equivalents, marketable and non-marketable securities, and accounts receivable. |
Recent Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Accounting Pronouncements Recently Adopted Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . Codification Improvements to Topic 326 Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments Financial Instruments – Credit Losses (Topic 326); Codification Improvements to Financial Instruments Financial instruments – credit losses (Topic 326): measurement of credit losses on financial statements Business Combinations (Topic 805): ccounting for Contract Assets and Contract Liabilities from Contracts with Customers Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, |
Assets for Lease, net (Tables)
Assets for Lease, net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Assets for Lease, net | |
Summary of assets for lease, net | March 31, December 31, 2023 2022 Assets for lease $ 3,970 $ 3,702 Less: accumulated depreciation (1,097) (1,224) Assets for lease, net $ 2,873 $ 2,478 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property and Equipment, net | |
Schedule of capital assets | March 31, December 31, 2023 2022 Capital assets $ 1,301 $ 1,206 Less: accumulated depreciation (598) (539) Capital assets, net $ 703 $ 667 |
Long-Term Investments (Tables)
Long-Term Investments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Long-Term Investments | |
Schedule of carrying value of non-marketable equity investments | March 31, December 31, 2023 2022 Investments in SYNAPS Dx $ 512 $ 512 Investments in Mellitus Health Inc. 309 309 Total initial cost $ 821 $ 821 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Measurements | |
Schedule of financial assets measured at fair value on a recurring basis | Fair Value Hierarchy Level 1 Level 2 Level 3 Total As of March 31, 2023 U.S. Treasury bills $ 37,663 $ — $ — $ 37,663 (Included in short-term investments) Investment in debt securities — — 4,072 4,072 (Included in notes held for investment) Total Assets $ 37,663 $ — $ 4,072 $ 41,735 Level 1 Level 2 Level 3 Total As of December 31, 2022 U.S. Treasury bill $ 20,073 $ — $ — $ 20,073 (Included in short-term investments) Investment in debt securities — — 3,679 3,679 (Included in notes held for investment) Total Assets $ 20,073 $ — $ 3,679 $ 23,752 |
Schedule of key inputs for the valuation model | March 31, 2023 Risk-free rate 3.67% - 4.67% Cash flow discount rate 26.4% - 28.7% Expert term in years 0.25 - 3.68 Expected volatility 105.0%- 205.0% |
Schedule of changes in the notes held for the investments | Convertible Notes Balance as of December 31, 2022 $ 3,679 Purchased 500 Change in fair value of the notes held for investment (107) Balance as of March 31, 2023 $ 4,072 |
Notes Held for Investment (Tabl
Notes Held for Investment (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Notes Held for Investment | |
Schedule of notes receivable | March 31 December 31 2023 2022 Senior secured promissory notes $ 1,000 $ 1,000 Secured convertible promissory notes 4,072 3,679 Total notes held for investment $ 5,072 $ 4,679 |
Other Non-current assets (Table
Other Non-current assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Other Non-current assets | |
Schedule of other non-current assets | March 31, December 31, 2023 2022 Prepaid licenses $ 2,487 $ 2,490 Other 331 352 Total other non-current assets $ 2,818 $ 2,842 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accrued Expenses | |
Schedule of accrued expenses | March 31, December 31, 2023 2022 Compensation $ 2,682 $ 2,467 Accrued Taxes 3,781 1,923 Miscellaneous Accruals 743 358 Total Accrued Expenses $ 7,206 $ 4,748 |
Lessee Arrangements (Tables)
Lessee Arrangements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Lessee Arrangements | |
Schedule of future minimum rental payments required under operating leases | Total 2023 Remaining period 67 2024 93 2025 71 Total undiscounted future minimum lease payments 231 Less: present value discount (7) Total lease liabilities 224 Lease expense in excess cash payment (12) Total ROU asset $ 212 |
Stock Incentive Plan (Tables)
Stock Incentive Plan (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Stock Incentive Plan | |
Schedule of stock option activity | Options Outstanding Weighted Average Number of Weighted Remaining Aggregate Stock Options Average Contractual Intrinsic Value Outstanding Exercise Price Term (In Years) (In Thousands) Balance, December 31, 2022 1,287,847 $ 3.44 3.03 $ 38,053 Options exercised — — — — Options granted — — — — Balance, March 31, 2023 1,287,847 $ 3.44 2.78 $ 30,100 Exercisable as of March 31, 2023 1,282,847 $ 3.34 2.76 $ 30,100 |
Schedule of stock-based compensation expense | Three months ended March 31, 2023 2022 Engineering and Product Development $ 45 $ 45 Sales and Marketing 170 172 General and Administrative 487 411 Total $ 702 $ 628 |
Net Income Per Share, Basic a_2
Net Income Per Share, Basic and Diluted (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Net Income Per Share, Basic and Diluted | |
Schedule of basic and diluted EPS | Three months ended March 31, 2023 2022 Shares Net Income EPS Shares Net Income EPS Basic 6,701,199 $ 4,969 $ 0.74 6,777,950 $ 3,360 $ 0.50 Common stock warrants 64,825 — 71,839 — Common stock options 1,130,019 — 1,266,667 — Diluted 7,896,043 $ 4,969 $ 0.63 8,116,456 $ 3,360 $ 0.41 |
Variably-Priced Revenue (Detail
Variably-Priced Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Variably-Priced Revenue | ||
Revenue from variable-fee licenses | $ 8,561 | $ 5,842 |
Revenue from sales of hardware and equipment accessories | $ 340 | $ 285 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Inventory | ||
Inventory balance | $ 512 | $ 469 |
Assets for Lease, net (Details)
Assets for Lease, net (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Assets for Lease, net | ||
Assets for lease | $ 3,970 | $ 3,702 |
Less: accumulated depreciation | (1,097) | (1,224) |
Assets for lease, net | $ 2,873 | $ 2,478 |
Assets for Lease, net - Additio
Assets for Lease, net - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Assets for Lease, net | ||
Lease revenue | $ 9,304 | $ 7,889 |
Depreciation expense | 70 | 108 |
Reduction to accumulated depreciation for returned and retired items | 197 | 90 |
Loss on disposal of assets for lease | $ (78) | $ (74) |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Property and Equipment, net | ||
Capital assets | $ 1,301 | $ 1,206 |
Less: accumulated depreciation | (598) | (539) |
Capital assets, net | $ 703 | $ 667 |
Property and Equipment, net - A
Property and Equipment, net - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Property and Equipment, net | ||
Depreciation expense | $ 59 | $ 46 |
Long-Term Investments (Details)
Long-Term Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Equity Securities without Readily Determinable Fair Value [Line Items] | ||
Total initial cost | $ 821 | $ 821 |
Investments in SYNAPS Dx | ||
Equity Securities without Readily Determinable Fair Value [Line Items] | ||
Total initial cost | 512 | 512 |
Investments in Mellitus Health Inc. | ||
Equity Securities without Readily Determinable Fair Value [Line Items] | ||
Total initial cost | $ 309 | $ 309 |
Long-Term Investments - Additio
Long-Term Investments - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Oct. 31, 2020 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2020 | |
Equity Securities without Readily Determinable Fair Value [Line Items] | ||||
Impairment | $ 0 | |||
Investments in Mellitus Health Inc. | ||||
Equity Securities without Readily Determinable Fair Value [Line Items] | ||||
Amount of shares purchased | $ 250 | |||
Promissory note from SYNAPS Dx | ||||
Equity Securities without Readily Determinable Fair Value [Line Items] | ||||
Principal amount | $ 500 | |||
Expense reimbursement | $ 100 | |||
Conversion value | 512 | $ 512 | ||
Convertible promissory note previously issued by Mellitus | ||||
Equity Securities without Readily Determinable Fair Value [Line Items] | ||||
Purchase price | 59 | |||
Principal amount | $ 50 | |||
Conversion value | $ 309 | $ 309 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 24, 2023 | Mar. 03, 2023 | Feb. 10, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
U.S. Treasury bill | $ 37,663 | $ 20,073 | |||
Investment in debt securities | 4,072 | 3,679 | |||
Total Assets | 41,735 | 23,752 | |||
Debt securities measured at fair value | 4,072 | 3,679 | |||
Purchase cost | 37,496 | ||||
Interest income | 305 | ||||
U.S. Treasury bill | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Purchase cost | $ 6,999 | $ 20,498 | $ 9,999 | ||
Interest rate | 4.51% | 4.84% | 4.61% | ||
Interest income | 167 | ||||
Recurring | Fair Value, Inputs, Level 1 [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
U.S. Treasury bill | 37,663 | 20,073 | |||
Total Assets | 37,663 | 20,073 | |||
Recurring | Fair Value, Inputs, Level 3 [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Investment in debt securities | 4,072 | 3,679 | |||
Total Assets | $ 4,072 | $ 3,679 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Short-Term Debt [Line Items] | ||
Debt securities measured at fair value | $ 4,072 | $ 3,679 |
Monarch Debt Security | ||
Short-Term Debt [Line Items] | ||
Percentage of probability of equity financing | 20% | |
Percentage of probability of change of control | 20% | |
Percentage of probability of payment at maturity or an insolvency event | 60% | |
Mellitus Convertible Notes | ||
Short-Term Debt [Line Items] | ||
Percentage of probability of equity financing | 70% | |
Percentage of probability of change of control | 8% | |
Percentage of probability of payment at maturity or an insolvency event | 22% |
Fair Value Measurements - Valua
Fair Value Measurements - Valuation model (Details) | Mar. 31, 2023 Y |
Risk-free interest rate | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.0367 |
Risk-free interest rate | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.0467 |
Cash flow discount rate | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.264 |
Cash flow discount rate | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.287 |
Expected term (in years) | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.25 |
Expected term (in years) | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 3.68 |
Expected volatility | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 1.050 |
Expected volatility | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 2.050 |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in the notes held for the investments with significant unobservable inputs (Details) - Level 3 - Convertible Notes $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |
Beginning balance | $ 3,679 |
Purchased | 500 |
Change in fair value of the notes held for investment | (107) |
Ending balance | $ 4,072 |
Notes Held for Investment (Deta
Notes Held for Investment (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 4 Months Ended | ||||
Jan. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) item | Jun. 30, 2022 USD ($) item | May 31, 2022 USD ($) | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Mar. 31, 2023 USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Total notes held for investment | $ 4,679 | $ 5,072 | $ 5,072 | ||||
Aggregate principal amount | 500 | ||||||
Fair value of the Debt Securities | 3,679 | 4,072 | 4,072 | ||||
Interest income from promissory notes | 82 | $ 0 | |||||
Changes in fair value | 107 | ||||||
Senior secured promissory notes | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Total notes held for investment | 1,000 | 1,000 | 1,000 | ||||
Interest rate (as a percent) | 5% | ||||||
Number of notes receivable | item | 2 | ||||||
Term (in years) | 3 years | ||||||
Aggregate principal amount | $ 1,000 | ||||||
Secured convertible promissory note | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Total notes held for investment | 3,679 | 4,072 | 4,072 | ||||
Secured convertible promissory note | Mellitus | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Interest rate (as a percent) | 10% | ||||||
Fair value of the Debt Securities | 179 | 214 | 214 | ||||
Aggregate principal amount | $ 179 | ||||||
Secured convertible promissory note | Monarch | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Aggregate principal amount | $ 500 | 3,500 | 4,000 | ||||
Maximum amount of available funding | 5,000 | ||||||
Transaction fee | 100 | ||||||
Remaining amount available to be drawn | $ 1,000 | ||||||
Option to extend the maturity date | item | 2 | ||||||
Period to extend the maturity date | 1 year | ||||||
Fair value of the Debt Securities | $ 3,500 | $ 3,858 | $ 3,858 | ||||
Interest rate | 10% |
Other Non-current assets - Sche
Other Non-current assets - Schedule of other non-current assets (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Other Non-current assets | ||
Prepaid licenses | $ 2,487 | $ 2,490 |
Other | 331 | 352 |
Total other non-current assets | $ 2,818 | $ 2,842 |
Other Non-current assets - Addi
Other Non-current assets - Additional Information Details (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Apr. 30, 2021 | Mar. 31, 2023 | Dec. 31, 2022 | |
Equity Securities without Readily Determinable Fair Value [Line Items] | |||
Term of agreement | 5 years | ||
ROU asset | $ 212 | $ 233 | |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other Assets, Noncurrent | Other Assets, Noncurrent | |
Miscellaneous receivables | $ 100 | $ 100 | |
Long-term deposits | $ 19 | $ 19 | |
Mellitus | |||
Equity Securities without Readily Determinable Fair Value [Line Items] | |||
Purchase of product licenses | $ 2,500 | ||
Renewal term of purchase agreement (in years) | 1 year | ||
Termination upon notice (in days) | 60 days | ||
Mellitus | Prepaid expenses and other current assets | |||
Equity Securities without Readily Determinable Fair Value [Line Items] | |||
Prepaid license purchases | $ 2,500 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Accrued Expenses | ||
Compensation | $ 2,682 | $ 2,467 |
Accrued Taxes | 3,781 | 1,923 |
Miscellaneous Accruals | 743 | 358 |
Total Accrued Expenses | $ 7,206 | $ 4,748 |
Concentration of Credit Risk (D
Concentration of Credit Risk (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 USD ($) item customer | Mar. 31, 2022 customer | Dec. 31, 2022 customer item | |
Concentration of Credit Risk | |||
Deposits | $ 5,305 | ||
U.S. treasury bills | 37,663 | ||
First Republic Bank and Edward Jones | |||
Concentration of Credit Risk | |||
Deposits | $ 5,198 | ||
Customer concentration risk | Revenue | |||
Concentration of Credit Risk | |||
Number of customers | customer | 2 | 2 | |
Customer concentration risk | Revenue | Customer one | |||
Concentration of Credit Risk | |||
Concentration risk percentage | 40.90% | 39.20% | |
Customer concentration risk | Revenue | Customer two | |||
Concentration of Credit Risk | |||
Concentration risk percentage | 33.50% | 31.70% | |
Customer concentration risk | Accounts receivable | |||
Concentration of Credit Risk | |||
Number of customers | customer | 3 | 3 | |
Customer concentration risk | Accounts receivable | Customer one | |||
Concentration of Credit Risk | |||
Concentration risk percentage | 60% | 26.80% | |
Customer concentration risk | Accounts receivable | Customer two | |||
Concentration of Credit Risk | |||
Concentration risk percentage | 15.40% | 25.90% | |
Customer concentration risk | Accounts receivable | Customer three | |||
Concentration of Credit Risk | |||
Concentration risk percentage | 13.60% | 16.80% | |
Vendor concentration risk | Accounts payable | |||
Concentration of Credit Risk | |||
Number of vendors | item | 2 | 2 | |
Vendor concentration risk | Accounts payable | Vendor one | |||
Concentration of Credit Risk | |||
Concentration risk percentage | 20.60% | 25.80% | |
Vendor concentration risk | Accounts payable | Vendor two | |||
Concentration of Credit Risk | |||
Concentration risk percentage | 13.90% | 10.80% |
Lessee Arrangements - Future mi
Lessee Arrangements - Future minimum rental payments (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Lessee Arrangements | ||
2023 Remaining period | $ 67 | |
2024 | 93 | |
2025 | 71 | |
Total undiscounted future minimum lease payments | 231 | |
Less: present value discount | (7) | |
Total lease liabilities | 224 | |
Lease expense in excess cash payment | (12) | |
Total ROU asset | $ 212 | $ 233 |
Lessee Arrangements - Lessee Ar
Lessee Arrangements - Lessee Arrangements (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Jul. 31, 2020 | |
Lessee Arrangements | ||||
Lease agreement term | 61 months | |||
Remaining lease term | 2 years 6 months | |||
Options to renew | false | |||
Lease expenses | $ 22 | $ 22 | ||
ROU asset | $ 212 | $ 233 | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other Assets, Noncurrent | Other Assets, Noncurrent | ||
Current lease liabilities | $ 86 | |||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other Liabilities, Current | |||
Noncurrent lease liabilities | $ 138 | |||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other Liabilities, Noncurrent |
Lessee Arrangements - Lessor Ar
Lessee Arrangements - Lessor Arrangements (Details) | Mar. 31, 2023 |
Lessee Arrangements | |
Lease, Practical Expedient, Lessor Single Lease Component [true false] | true |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||
Jan. 01, 2022 | Jan. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) item | Mar. 31, 2023 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Commitments and Contingencies | ||||||
Retention credit | $ 1,240 | $ 1,240 | ||||
Credit claimed | 0 | $ 0 | ||||
Aggregate principal amount | $ 500 | |||||
Employer matching contribution | 50% | |||||
Maximum | ||||||
Commitments and Contingencies | ||||||
Maximum contribution of percentage of employee's eligible earnings | 6% | |||||
Senior secured convertible promissory note | Monarch | ||||||
Commitments and Contingencies | ||||||
Maximum amount of available funding | $ 5,000 | 5,000 | ||||
Aggregate principal amount | $ 500 | 3,500 | $ 4,000 | |||
Transaction fee | 100 | |||||
Remaining amount available to be drawn | $ 1,000 | $ 1,000 | ||||
Option to extend the maturity date | item | 2 | |||||
Period to extend the maturity date | 1 year | |||||
Interest rate | 10% |
Stock Incentive Plan - Addition
Stock Incentive Plan - Additional Information (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | |||
Oct. 31, 2015 shares | Mar. 31, 2023 USD ($) shares | Mar. 31, 2022 USD ($) employee shares | Jan. 01, 2023 shares | Sep. 30, 2014 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ | $ 702 | $ 628 | |||
Aggregate of shares granted fully vested stock awards | 18,048 | 8,406 | |||
Fair value of stock awards on grant date | $ | $ 695 | $ 628 | |||
Net shares issued after deducting taxes paid on granted shares | 14,099 | 6,988 | |||
Number of non-employees | employee | 1 | ||||
2014 Stock Incentive Plan | Stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares increase in share reserve | 267,685 | ||||
Maximum number of shares issued pursuant to awards granted under plan | 3,582,888 | 450,000 | |||
Number of share reserve approved | 1,500,000 | ||||
Maximum term of stock option grants | 10 years | ||||
Percentage of shares reserve increased | 4% | ||||
Number of shares available for future stock-based compensation grants | 1,725,256 | ||||
Total unrecognized compensation cost related to non-vested awards | $ | $ 87 | ||||
Weighted average period of unvested stock awards | 3 years 4 months 24 days | ||||
Total number of unvested shares | 3,582,888 | ||||
2007 Key Person Stock Option Plan | Stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares available for future stock-based compensation grants | 0 |
Stock Incentive Plan - Treasury
Stock Incentive Plan - Treasury Stock Acquired (Details) - USD ($) $ in Thousands | 3 Months Ended | 15 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2023 | Mar. 14, 2022 | |
Stock Incentive Plan | |||
Shares authorized under Share Repurchase Program | $ 20,000 | ||
Treasury stock acquired (in shares) | 148,500 | ||
Cost of treasury stock acquired | $ 99 | $ 4,991 |
Stock Incentive Plan - Stock op
Stock Incentive Plan - Stock option activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Number of Stock Options Outstanding | |||
Balance, Beginning | 1,287,847 | ||
Options granted | 0 | 0 | |
Balance, Ending | 1,287,847 | 1,287,847 | |
Exercisable, Ending | 1,282,847 | ||
Weighted Average Exercise Price | |||
Balance, Beginning | $ 3.44 | ||
Balance, Ending | 3.44 | $ 3.44 | |
Exercisable, Ending | $ 3.34 | ||
Weighted Average Remaining Contractual Term, Options Outstanding (in years) | 2 years 9 months 10 days | 3 years 10 days | |
Weighted Average Remaining Contractual Term, Options Exercisable (in years) | 2 years 9 months 3 days | ||
Aggregate Intrinsic Value, Options Outstanding | $ 30,100 | $ 38,053 | |
Aggregate Intrinsic Value, Options Exercisable | $ 30,100 |
Stock Incentive Plan - Stock _2
Stock Incentive Plan - Stock option - additional information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options granted | 0 | 0 |
2014 Stock Incentive Plan | Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair value of unvested stock options | $ 87 | |
Weighted average period of unvested stock awards | 3 years 4 months 24 days |
Stock Incentive Plan - Stock-ba
Stock Incentive Plan - Stock-based compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 702 | $ 628 |
Engineering and Product Development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 45 | 45 |
Sales and Marketing | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 170 | 172 |
General and Administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 487 | $ 411 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Income Taxes | |||
Income tax provision | $ 1,664 | $ 583 | |
Effective income tax rate | 24.68% | 14.79% | |
Federal statutory rate | 21% | ||
Unrecognized tax benefits | $ 447 | $ 401 | |
Interest and penalty expenses related to uncertain tax positions | $ 42 | $ 30 |
Net Income Per Share, Basic a_3
Net Income Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Net Income Per Share, Basic and Diluted | ||
Basic shares (in shares) | 6,701,199 | 6,777,950 |
Common stock warrants (in shares) | 64,825 | 71,839 |
Common stock options (in shares) | 1,130,019 | 1,266,667 |
Diluted shares (in shares) | 7,896,043 | 8,116,456 |
Net Income - Basic EPS | $ 4,969 | $ 3,360 |
Net Income - Common stock warrants | 0 | 0 |
Net Income - Common stock options | 0 | 0 |
Net Income - Diluted EPS | $ 4,969 | $ 3,360 |
Basic EPS (in dollars per share) | $ 0.74 | $ 0.50 |
Diluted EPS (in dollars per share) | $ 0.63 | $ 0.41 |
Net Income Per Share, Basic a_4
Net Income Per Share, Basic and Diluted - Additional Information (Details) - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Common Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securities excluded from the computation of diluted net income per share | 0 | |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securities excluded from the computation of diluted net income per share | 5,000 |